EpiPen maker may have overcharged Medicaid by $1.27B

EpiPen maker may have overcharged Medicaid by $1.27B
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Mylan, the company that makes EpiPens, may have overcharged taxpayers by as much as $1.27 billion over the past decade for emergency allergy treatment, according to a new report by a government watchdog.

The embattled drugmaker is under scrutiny for potentially misclassifying the EpiPen in a way that allowed it to charge Medicaid significantly more than it might have otherwise. 

According to a Department of Health and Human Services Office of Inspector General (OIG) report, Mylan classified the EpiPen as a generic drug rather than a brand-name product. Under the Medicaid program, brand-name drugmakers have to provide steep discounts for their products that generic drugmakers don't have to offer.

According to the OIG, Mylan improperly classified the EpiPen and then ignored federal regulators when they informed the company that it was the wrong rebate.

Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyOvernight Tech: Facebook faces crisis over Cambridge Analytica data | Lawmakers demand answers | What to watch for next | Day one of AT&T's merger trial | Self-driving Uber car kills pedestrian Overnight Cybersecurity: Trump-linked data firm Cambridge Analytica attracts scrutiny | House passes cyber response team bill | What to know about Russian cyberattacks on energy grid Overnight Finance: Congress races to finish .2T funding bill | What to look for in omnibus | AT&T merger trial kicks off | Stocks fall on tech troubles | Trump targets Venezuelan cryptocurrency | Record SEC whistleblower payout MORE (R-Iowa) has made public a copy of a letter from the OIG on the issue.

The company allegedly reached a $465 million settlement with the Department of Justice (DOJ) last year over the classification issue, but the DOJ has not confirmed the settlement.

Grassley has been critical of the settlement, calling it too small. He attempted to invite Mylan's CEO, Heather Bresch, to testify before a Senate Judiciary Committee hearing in November but canceled the hearing when she refused to attend. 

Last year, Mylan drew the ire of the public and of Congress for raising the price of a two-pack of the EpiPen injector since 2007 from $100 to more than $600.

The drug can be a lifesaver for people with severe allergic reactions.